Photo courtesy of Summit Lawns
When it comes to planning ahead for budgeting, Ted Glaser says the Summit Lawns team obsessed over the "cogs" and not the gross margin.
"We've combatted wage inflation through efficiencies just by better managing our labor, empowering our teams to be more capable, and also just price increases," Glaser says. "We're hyper-focused on the actual expense ratio, not the profit left over."
This focus has led Glaser to examine labor, subcontractors and — yes — the cost of materials. Glaser says Summit Lawns, which he expects to pull in just over $5 million in revenue this year, didn't experience significant fertilizer cost increases through tariffs. Glaser believes part of that reason is because the company completed its early order programs in November and December, but it also helps that Summit Lawns has become more efficient, too.
"We haven't seen substantial product increases, and I'd argue that we're managing our inventory better," Glaser says.
Glaser told Lawn & Landscape about implementing a pay-for-performance model last year with his lawn care department, and the company expanded it to the mowing department this year, too. "We've seen a significant decrease in our mowing labor percentage because behaviorally, the guys are behaving differently," Glaser says now. "They're doing more work, faster."
Meanwhile, Summit Lawns has leveraged EOPs for the last four years but has learned a few valuable lessons about what to do when they've ordered too much. "One of the things we've been more cognizant of is that if we have excess material, send it back," Glaser says. "Don't let $50,000 in material just sit on the shelf. That's $50,000 in cash that's just sitting there that we can't use for different purposes."
This process works for Summit Lawns because of its relationship with its distributors. Some distributors might be able to store materials for landscapers, too. "We're a large purchaser in our market, so we have good terms with (our distributors)," Glaser says.
He also acknowledges that there's some risk involved, too. Glaser acknowledges it's on the ordering company to ensure they're not overspending or buying too much material. Plus, there are some materials that distributors likely won't take back. And even then, there's the risk that the overspend on materials one year would actually be cheaper on materials down the line.
"We're taking the gamble that maybe this stuff is going to cost more next year, but I'd rather have my money now and give us more flexibility to make gross changes, make opportunities for existing team with promotions and new roles," Glaser says. "It gives us the cash to do that."
